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This chapter examines the ideational and political movements advocating market-based forms of delegated governance since the 1970s. In part, the embrace of marketizing reforms reflected the refinement of ideas about the inefficient and oppressive nature of government as juxtaposed with the dynamism, efficiency, and liberating qualities of markets and individual choice. Some conservative and centrist policy-makers also believed the American state was inherently weak—a self-fulfilling prophecy given their longstanding resistance to building effective bureaucratic capacity at the federal level....

This chapter examines the ideational and political movements advocating market-based forms of delegated governance since the 1970s. In part, the embrace of marketizing reforms reflected the refinement of ideas about the inefficient and oppressive nature of government as juxtaposed with the dynamism, efficiency, and liberating qualities of markets and individual choice. Some conservative and centrist policy-makers also believed the American state was inherently weak—a self-fulfilling prophecy given their longstanding resistance to building effective bureaucratic capacity at the federal level. In a context of rising health care costs, some policy-makers sought ways to make private insurers do the tough work of disciplining health care interests, delegating to these non-governmental authorities responsibility for meting out pain to medical providers. We trace this impulse through the push for allowing HMOs to administer Medicare benefits; the gathering enthusiasm for managed competition and the Clinton health care reform effort of 1993/94; proposals that emerged in the 1990s for complete Medicare voucherization; and the movement for Health Savings Accounts.